Non-bank lender RESIMAC is understood to have made an approach to acquire listed company
RHG
, formerly known as RAMS Mortgage Corp, in a transaction that may fetch about $150 million.

RHG on Monday evening confirmed in a statement to the ASX it had received an approach regarding a possible asset sale of its loan book.

“Discussions are not concluded and there are complex transactional and commercial issues involved," RHG said, noting that it was uncertain whether a transaction would proceed.

Sydney-based RESIMAC is in talks with RHG’s board, led by executive chairman
Glenn Goddard
. The offer is conditional and non-binding, sources told The Australian Financial Review’s Capital. It depends on financing and due diligence and remains at a preliminary stage.

RHG’s stock was placed in a trading halt on Monday.

One analyst said with $118 million of equity on the balance sheet and future earnings, a bid for RHG could be pitched at $150 million to $170 million. RHG has a market value of $143 million.

RESIMAC declined to comment.

Sources said RHG was attractive because of its technology systems and the composition of the loan book, which is in run-off.

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The loan book is thought to be trading at an average premium of 1 per cent to 2 per cent, and taking into account net tangible assets and the value of future franking credits, investors are already factoring in a valuation premium.

RHG’s shares last traded at 46.5¢. The loan book may be fully repaid in about four years.

RESIMAC, a wholesale lender, was founded in 1985 to service and securitise residential loans for the NSW state government housing program HomeFund and was the first issuer of Australian Residential Mortgage-Backed Securities in 1988. It has funded more than $12 billion and its strategic ­partners include Perpetual Trustees and National Australia Bank.

As at November 1, RHG’s mortgage book amounted to $2.49 billion. The loan portfolio, which stood at $4.4 billion two years ago, is in run-off, meaning no new loans are being written.

RHG reported net profit of $40.7 million in the year ended June 30, down 45 per cent on the previous 12-month period. Dividend payouts amounted to $63.2 million for the financial year.

RHG has been on the block before. Grant Samuel ran a sale process in 2011, which attracted some interest from parties including Pepper Home­loans and Firstfolio. But the process didn’t yield a genuine offer.

Investors in RHG, including boutique advisory firm Alceon and Cadence Capital, have reaped strong dividends in recent years. Alceon, which is run by founder Trevor Loewensohn and counts former Babcock & Brown chief Phil Green as a consultant, bought a stake of just under 20 per cent in RHG two years ago at an average entry price of about 46¢.

Cadence’s managing director Karl Siegling said tax considerations around any offer for RHG were important, as the company paid out strong fully-franked dividends.

“Any approach to shareholders would have to be evaluated not only for its price but the structure," he said.“We are very pleased with the way the book is running off ... which is at a slower rate and at a higher profit than we had originally modelled."

Wilson Asset Management also holds just under 5 per cent of RHG .

Lenders – those still writing mortgages – are grappling with the slowest annual credit growth since records began in 1976.

RHG has cautioned of “substantially lower" profits as the loan book continued to reduce in size. “The nature of our mortgage book is an amortising asset," Mr Goddard told investors at the company’s annual general meeting in November.The company adopted the name RHG after selling the RAMS brand name to Westpac Banking Corp in 2007, as smaller lenders reeled from the global financial crisis. RAMS, which listed just prior to an unravelling of financial markets, took a ­massive hit.

Businessman John Kinghorn founded RHG as RAMS in 1991. He made about $600 million on the 2007 float of the company.